Elcoteq-Videocon: negotiations falter

Editor: Anke Schröter

Negotiations between EMS-provider Elcoteq and the possible Indian investor Videocon have apparently slowed down to a halt.

Creditors of the Luxembourg-based EMS-provider are said to have set stiff terms to restructure the loss-making firm’s debt, the Economic Times India writes. “There are certain issues with the creditors. It could be a close call, but we are watching the developments,” Videocon's Venugopal Dhoot told the newspaper.
It appears that several creditors believe that higher compensations can be negotiated.
The Extraordinary General Meeting (EGM) of the shareholders of Elcoteq (held on February 23, 2010) decided on the proposal of the Board of Directors to reduce the par value of shares and to increase the authorised share capital. In light of the strenghtening of balance sheet, the EGM deemed that the size of the proposed authorisation to increase the share capital up to €200,000,000 was too high and the decrease of the par value of shares is not needed.
Additional to that, the proposals to decrease the share capital of the company from its current amount of €8,944,874 and to decrease the current par value of A-shares (€0.40) and of K-shares (€0.04) were also rejected.